France: Flash composite PMI edges down to seven-month low in March
The IHS Markit flash composite Purchasing Managers’ Index (PMI) dropped from 57.3 points in February (previously reported: 57.8 points) to 56.2 points in March, the lowest print since August 2017. The reading came in well below market expectations of a softer drop to 57.0 points. Despite the decline, the indicator remains above the 50-point threshold that separates expansion from contraction in business activity, while the rate of expansion in March exceeded the long-run series average.
March’s sharper-than-expected decline reflected softer expansions in new orders and output. The declines in these two components were observed in both the manufacturing and services sectors. Employment growth in the private sector decelerated in March compared to February, as the rate of hiring among service providers eased. In turn, staffing was unchanged in manufacturing. Despite higher staffing, backlogs of work continued to accumulate, and the rate of increase quickened in the surveyed month. Regarding price developments, higher prices for raw materials such as steel and aluminum pushed input prices higher and resulted in a corresponding increase in output prices.
Commenting on March’s figure, Alex Gill, Economist at IHS Markit, said:
“Strong client demand in both domestic and foreign markets continues to support output and employment. Meanwhile, a further robust degree of business confidence combined with a sharp and accelerated accumulation of outstanding business suggests further growth in the coming months.”